For many reasons, forex charts usually obey some patterns. If
you work with them and your eyes get familiar with them, these
patterns are very powerful tools to guide you during your
trades. There are many patterns and each of them has its name
but to be simple and short I explain here only the most proven
patterns which always work and you can rely on.
1. The Most Profitable Forex Chart Patterns
For many reasons, forex charts usually obey some patterns.
If you work with them and your eyes get familiar with them,
these patterns are very powerful tools to guide you during
your trades. There are many patterns and each of them has
its name but to be simple and short I explain here only the
most proven patterns which always work and you can rely on.
3-1 M and W (Bat) Patterns
These are the most frequent chart patterns and more or less
have M or W shapes. Sometimes, one leg extends or another
leg gets short. These are not very accurate signals but
they help you to get a rough estimation of a currency move.
3-2 Weakening M and Strengthening W (Triangle) Patterns
In contrast to M and W patterns, weakening M and
strengthening W patterns are very accurate signals. A
weakening M occurs when an upward (bullish) move is
completed, then a weaker downward move (one third or half
of the first move) forms and then a very weak (usually one
candle) bullish follows it. After completion of the third
move you can say with a high confidence that the currency
price will sharply drop. This is the point you should sell
the currency and gain a nice profit. Strengthening W
pattern has just the same story but in a reverse order. I
love triangle patterns because they are very strong signals
and nearly always are correct.
3-3 Weakening Upward or Downward (Cascade) Patterns
These are in fact upward or downward moves that get weaken
during the time. For example, an upward move starts with
three bullish candles, then continues by one bearish
candle, then two bullish and again one bearish and hence
forth. It is obvious that the move gets weaken and then
tends to reverse (a major or minor reversal depends on the
support/resistance type, for example if a weakening upward
cascade reaches a major resistance level it is highly
expected to go for a big reversal). These patterns are
tradable in two forms. The first is at the time when only
2. the first few bullish or bearish candles have formed and
the move is in its half way to get matured (reach a support
or resistance level). At this time we can buy or sell and
wait until the move ends, then close the trade with profit.
However, these are short or medium range moves and we can
not expect so much pips. The second better use is at the
time when a move gets matured and a reversal is imminent.
We can take this opportunity and trade. I also like
weakening cascades because they are very reliable and
stable signals.
3-4 J or Reverse J Patterns
These patterns form when a move starts with very dwarf body
candles and during the time the candles get taller and the
move escalates. In these patterns the candles are usually
uniform (full bullish in upward or full bearish in downward
moves). The start of such patterns are usually from a
strong support or resistance and they are profitable if the
trader recognize them at the very early stages. If they
grabbed in time, they are very reliable and profitable.
3-5 Fractals
Fractals in general are regularly repeated shapes in
various scales. Fractals occur in forex charts and are very
various in in both shape and size. If a fractal is detected
in the early stages (when the first or second fractal has
shaped), the trader can trade on it. Trading fractals needs
much experience and many forex professionals use them in
their advantage.
You can get an amazing Forex trading system for free from the below address.
With an amazing 90% profitable trade rate, the system has proven itself during
the time. The system is full of rare, top secret tips and strategies that only 1% of
Forex traders know them. I earn constantly 3200 pips a month using this system. It
is so easy that you can do indeed. This offer is only valid for a short time. So, just
don't miss this one time in a life opportunity.
Get the system for FREE here: http://thebestforexsystem.tumblr.com/